Mumbai, Dec 12 (IANS): IIHL, a Hinduja Group company and the successful resolution applicant, is facing obstacles in progressing its Rs 9,861 crore Resolution Plan for Reliance Capital Ltd. due to ongoing litigation.
Despite receiving an overwhelming 99.6 per cent approval from the Committee of Creditors (COC) of RCAP in June 2023, the Resolution Plan has yet to secure the final NCLT approval.
The delay in NCLT approval is just one of the challenges hindering the successful conclusion of Reliance Capital's resolution process. The SC has not yet addressed Torrent Investment's plea, challenging the second round of auction for the sale of Reliance Capital assets, and awaits a final hearing.
IIHL's resolution plan, valued at Rs 9,861 crore, encompasses three components.
Firstly, Rs 9,650 crore will be allocated to financial creditors for settling outstanding loans, operational creditors, and other claims. Additionally, IIHL will reimburse Rs 200 crore to the COC for the capital infusion into Reliance General Insurance Company (RGIC), and the remaining Rs 11 crore will be paid for the lack of due diligence by the previous directors of the corporate debtors, under section 66 (2) of the IBC Code.
IIHL was the only bidder in the second round of auction of Reliance Capital, held in April 2023. The company made an all cash bid of Rs 9861 crore for the Reliance Capital assets, including its general & life insurance business.
In June 2023, RCAP's COC approved IIHL's resolution plan with 99.6 per cent votes, and post that, the administrator filed the final resolution plan with the NCLT for its final approval.
Timeline
April 26, 2023: Second Round of Auction for Reliance Capital.
June 29 2023: Lenders approval on IIHL Resolution Plan with 99.6 per cent voting.
July 13 2023: Administrator files IIHL's Resolution Plan for NCLT approval.
August 25 2023: SC, on Torrent's plea, refuses to stay proceedings before the NCLT.
October 1, 2023: NCLT rejects Torrent Investment's plea seeking stay on the approval of the Resolution Plan.
October 3, 2023: Torrent Investment files Letter of urgency before the SC.